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Episode 259 - Saying NO is Hard: How to Stop Overspending on Others

Have you ever felt obligated to lend money or cover expenses out of guilt or obligation? Setting strong financial boundaries is crucial to protecting your finances and achieving financial stability. This blog post will explore why financial boundaries are essential, how to set them, and the benefits they bring.  

 

Why Financial Boundaries Are Essential  

Protecting Your Financial Goals - Financial boundaries ensure that your own financial priorities and goals are met before you assist others. Defining these boundaries requires knowing your financial objectives. For instance, if you are saving for an emergency fund or the holiday season, you need to ensure that lending money won't compromise those goals. Setting and respecting boundaries allow you to preserve your financial health.  

Reducing Stress - Saying no can significantly reduce the financial strain and stress that come from overextending yourself. Lending money you can’t afford to give away might lead to financial difficulties, such as struggling to pay for essentials like groceries. Assess whether lending will harm your financial situation and cause unnecessary stress.  

Empowering Others - By setting boundaries, you encourage others to take responsibility for their finances. This doesn't mean you refuse to help; instead, offer support in other ways, such as helping them budget or manage their money better. Encouraging financial independence strengthens relationships and fosters mutual respect.  

Benefits of Financial Boundaries  

Avoiding Burnout - Setting financial boundaries helps prevent burnout by ensuring you do not overextend yourself. Maintaining limits allows you to balance your life better and avoid the exhaustion that comes from constant worry about money lent to others.  

Improved Mental Health - Clear boundaries can reduce anxiety and stress by preventing you from taking on too much responsibility for others' emotions and behaviors. You should care for your financial stability first, so you don’t end up stressed and frustrated by others’ financial woes.  

Building Healthier Relationships - Setting financial boundaries fosters mutual respect and understanding, helping build stronger and more positive relationships. By being clear about your financial capabilities, you can communicate openly, avoid misunderstandings, and preserve relationships.  

How to Set Financial Boundaries  

Assess Your Finances - Know your budget and what you can realistically afford to lend or give away. If possible, consider any money lent as a gift not expected to be repaid.  

Communicate Clearly - Be honest and straightforward when you decide to decline a financial request. Whether due to a personal goal or financial strain, clear communication helps maintain mutual respect.  

Offer Alternatives - Suggest non-financial ways to help, such as offering advice or resources to manage their budget. Providing support doesn’t always mean giving money.  

Practice Saying No - It can be challenging at first but gets easier with practice. Remember that saying no to others often means saying yes to your financial health.  

Example Responses  

When someone asks to borrow money, here are some possible responses: - "I'm working towards my own financial goals right now, so I can't lend you money, but I can help you look for ways to manage your budget." - "I have a policy of not lending money to friends and family to avoid any potential strain in our relationship." Financial boundaries are not about being selfish; they're about aligning lending practices with personal financial goals and mental well-being. By establishing and maintaining these boundaries, you safeguard your financial health and ensure healthier, more respectful relationships. As Brené Brown wisely said, "Daring to set boundaries is about having the courage to love ourselves even when we risk disappointing others." Start today by assessing your finances and practicing clear, respectful ways to say no. Your future self will thank you. For further steps on improving your finances, check out the free workshop called Life Without Payments available at DebtFreeDad.com. Stay strong and set those boundaries for a better financial future. 

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Episode Transcript: 

Amber:  

Have you ever found yourself saying yes to lending money or covering expenses out of guilt or obligation? It's time to learn how to protect your finances by setting strong financial boundaries. Hi, I'm Amber, today's host for the Debt-Free Dad Podcast, where we help normal everyday people like you take control of your finances so you can live a happier, less stressful life. So, if you're like me, you maybe have lost a friendship or strained a friendship over money once or twice. Now I wanted to help a friend out who was short on funds and needed some money, and we discussed how much I was going to lend her, what the payment plan was going to look like and how that was all going to happen and when and the time frame and everything. But that time frame kept getting pushed back for one reason or another. Pushed back, pushed back, right. I'm sure a lot of you were pushed back, right. I'm sure a lot of you were sitting there going yeah, I relate to that. And in the end, our friendship was strained by the lack of communication and, unfortunately, the way the situation was handled. So our friendship ended and, unfortunately, I lost a friend over it and since then I have told myself if I'm going to lend money. I am basically going to say this is a gift. If you want to give it back to me, awesome, but I'm not expecting it to come back to me and I do this when I'm able to and we're definitely going to get into that. But I also set boundaries with lending my time, because time to me is money. I work for myself, I work from home and a lot of people may want to try and take advantage of that. If you're in a situation like that, like well, you work from home, you could do X, y, z, or you work from home, can you give me a ride somewhere? You know, can you take me to this appointment? I'm not gonna be able to drive after whatever that looks like, and I'm more than happy to help out friends and family. But I also have to set boundaries and limit my time, because if I'm out doing something else, I'm losing money. So if I get asked to do those things, I definitely will say yes, but I also will say no from time to time and set those boundaries.

Amber:  

So here's a few reasons why financial boundaries are super essential. Number one is it protects your financial goals. Financial boundaries help ensure that your own financial priorities and goals are met before assisting others. Now you're going to have to know what these goals are in order to set those boundaries. So if you have a savings goal to save an emergency fund within 30 to 60 days, or you have a savings goal to save for the holiday season, and somebody comes and asks you can I borrow $100? But the only $100 that you might have access to is for the savings goal, this is going to hurt your savings goal, so you want to protect that savings goal and set that boundary.

Amber:  

Now, number two is it'll also reduce stress. So saying no can reduce financial strain and stress that comes from overextending yourself. If you overextend yourself and you say yes, I'll do this, or yes, I can lend you that, or you could essentially be like oh my gosh, how am I going to pay for groceries? You know it's nearing the end of the month, I'm running out of money. I've got a week left. Like, I just I lent them this money and they're not paying me back. It's. It can be super stressful. So you got to learn to know. You know, can I lend them this money? Like, is this going to hurt me? And it's going to. Is this going to stress me out. And then number three is it helps empower others. So by setting boundaries, you encourage others to take responsibility for their own finances, and this doesn't mean you just say, no, I'm not helping you. This can mean that you're offering them support or help in another way with maybe helping them with their budget or something. Right Now.

Amber:  

There are some pretty interesting statistics when it comes to lending money to friends and family, and that's generally who we're going to lend money to, right. So, according to a survey by creditcardscom, 42% of people who lent money to friends or family reported losing money. That's almost half the people who lent money to their friends and family, almost like they lost money. They lost money. Whether they lost it all, got some of it back. And a survey from findercom reports that Americans owe approximately $182 billion to friends and family, and despite this, only 49% of borrowers fully repay their loans and only 4% have no plans to repay the money, which constrain relationships, and I'm sure a lot of you have felt this way.

Amber:  

So there are several benefits, though, to setting these boundaries. We talked about the essential reasons why you should set the boundaries, but there are a lot of benefits too. It helps you avoid burnout. Setting boundaries helps prevent burnout by ensuring that you do not overextend yourself. Right, this allows you to maintain a healthier balance in life and avoid exhaustion, because when you're constantly thinking about, oh, they owe me money and this you know, you'll feel I don't know about you. But especially with social media now you might be like they just went out to this fancy restaurant and they owe me $100. You don't know if maybe mom paid at the restaurant, you don't know if whoever they were with covered that bill. But that's why avoiding, maybe, or setting those boundaries is really important.

Amber:  

Second, it can lead to improved mental health. So clear boundaries can reduce anxiety and stress by preventing you from taking on too much responsibility for others' emotions and behaviors, right, so you might be like, oh, they really, they really need it, oh, they're struggling so bad. And then you're just taking on this extra stress because they're struggling so bad. But then, in turn, it might be leaving you struggle or you frustrated, and it's putting that strain on that relationship. And that brings us on to number three is, by setting boundaries you build healthier relationships. Right, you can foster that mutual respect and understanding, helping to build stronger and more positive relationships with others. So it allows each person to just have more open communication by saying you know what, I just can't lend you this this time, I don't have the money or it's just not in my plan right now by setting those. Or maybe you offer them like, hey, you know, I noticed you're often asking to borrow money around the same time each month. Is there maybe something I could help you with? Like I've gotten really good at my own budget or my own financial goals. Maybe I could help you do the same and maybe, instead of offering them to give them money, you're now going to help them build a plan and create a budget, and if they don't want to do that, that's not on you. So just know that setting those boundaries will also help build healthier relationships and people will respect you a lot more. They might be upset at first, but in the end, you're saving that relationship in the long run.

Amber:  

So how do you set financial boundaries Right? Because I know it's easy. I'm like I have gotten mastered the word no. The word no is a full sentence, by the way, but it's not as easy to say no to somebody in a situation as it is to just say well, you should just say no. So assess your finances. You need to know your budget and what you can realistically afford to lend or give. And if it's up to me, I'm just giving it. Like, if I have the extra money, sure I'm going to give it to you. I will help you out. If you feel you want to pay me back, I will gladly take it back. Communicate clearly. So you want to be honest and straightforward with your reasons when you decide to decline a financial request, all right.

Amber:  

So if you're deciding like, listen, I just can't do it right now, be honest and open with them, whether it's I have a financial goal that I'm working towards and I need to focus on that, or you know, groceries are expensive and I just I'm tight this month and I just can't help you. I'm sorry. Maybe offer alternatives. So suggest to them some non-financial ways that you could help, like offering advice or resources to help them budget, to help them find ways to make whatever it is that they're trying to do happen. Um and yeah, practice saying no. It can be difficult at first, god. It can be difficult the 30th time you do it, but it gets easier with practice.

Amber:  

And remember that saying no to others is saying yes to your financial health. And it's the opposite when you say yes to others, you're likely saying no to something in your own personal finances that you have a goal for. So here's an example of what you can say to somebody who asks you to borrow some money and it's just not something that you're able to do, or it's not. It's going to pull away from your personal goals, right? So maybe somebody asked you for money and you could say something like I'm working towards my own financial goals right now, so I can't lend you money, but I can help you look for ways to manage your budget. So you've said no, but you've offered them something in return. Another thing, another way to say it is I have a policy of not lending money to friends and family to avoid any potential strain in our relationship. Those statistics above 50% of people almost are not paying back.

Amber:  

And if that, if you know that that's going to cause a strain on your relationship with that person, then you've got to learn to set those boundaries and say no. Unless you want uncomfortable situations with your friends and family, it's important to set boundaries and it's not a bad thing. You're not a bad person for setting boundaries with friends, family, acquaintances. It doesn't matter who it is. If it doesn't align with your goals, with your desires, with what you have planned for your future, it's okay to say no. Now, as we wrap up, I wanted to share this powerful quote by Brene Brown. She says daring to set boundaries is about having the courage to love ourselves even when we risk disappointing others. So take the first step today by assessing your finances and practicing a clear, respectful way to say no. Your future self will thank you for it. And if you wanna take your finances a step further, we've got an awesome free workshop called Life Without Payments. You could find it on debtfreedad.com and we'll see you on another episode.

 

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